Prices on manufactured goods rose by a slight 0.1 percent in June after two months of declines, the U.S. Department of Labor announced Friday in its Producer Price Index report.
Excluding the more volatile energy and food sectors, price tags on finished goods -- such as light motor trucks, home appliances and pet foods -- rose 0.2 percent in June after dropping 1.0 percent in May and 0.2 percent in April.
The price of finished goods is a key and "closely watched" economic measure. But the June report is not expected to inflate the overall consumer price index, which is much broader and includes rents and services, said Josh Bivens, research director of the Economic Policy Institute in Washington, D.C.
"Today, the producer price index is a very small part of what shows up in the overall consumer price index," Bivens said. "Most of the stuff we consume today is not part of the producer price index."
Still the producer price index gives a pulse on pricing for factory-made goods. While overall factory prices rose just 0.1 percent in June, finished consumer foods rose 0.5 percent in June, marking the biggest jump since November's rise of 1.0 percent.
In contrast, energy prices fell 0.9 percent in June. It was the fourth consecutive month that energy prices fell, bringing relief to drivers, homeowners and companies alike.
Unfinished components and supplies sold to manufacturers saw prices slide 0.5 percent in June to create the third consecutive month of declines.
Partially processed foods and feed rose 1.0 percent in June, which marked the biggest jump since August reported a gain of 1.4 percent. An uptick in processing costs for animal food was largely responsible for June's growth, Labor Department officials said.
Goods classified as raw or crude fell 3.6 percent during the month, largely thanks to a drop in crude energy prices. For the past three months, all crude prices fell 10.8 percent.
Bivens noted that "the weak economy will put a lot of downward pressure on prices until we see much bigger growth. The weak economy means that manufacturers don't have a lot of new customers coming in the door."
Dee DePass • 612-673-7725